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Boston Area Sees Record High Home Sales in May

Sales of single-family homes improved on an annual basis for a second consecutive month in May, climbing 10 percent, or more than 100 units from the same month last year, to set a new record high for the month.  Last month’s sales total of 1,105 homes sold eclipses the previous high for the month set nearly a decade ago when 1,069 single-family homes sold in May 2004. 

Strong gains on Wall Street during the first quarter of the year, along with steady job growth in the local economy, and a half-year of rising home prices have all helped to boost buyer demand this spring.  In addition, limited inventory levels and a small uptick in mortgage rates have created a sense of urgency among prospective home buyers that has further contributed to the record-setting sales pace in May.

On a month-to-month basis detached single-family home sales rose even more sharply in May, increasing 42.2 percent from an upwardly revised 777 detached home sales in April.  Last month’s sales gain exceeds the 35.5 percent increase in month-to-month sales between April and May 2012, due in part to this year’s slower start to the spring market.  Of course, the healthier sales pace over the past month is not a surprise given the cyclical nature of the housing market in New England.  Still it is noteworthy given the sharply lower inventory level of homes for sale in this year’s spring market.

In the condominium market, sales rose in May for a seventeenth consecutive month on annual basis, increasing modestly by 4 percent from the same month one year ago.  A total of 1,052 condo units were sold in May 2013, which is the highest sales volume for the month in six years dating back to 2007 when a May record of 1,195 condos were sold.  Last month’s sales total is the fourth highest sales total on record for the month of May in Greater Boston, surpassed only by May 2007 (1,195), May 2005 (1,151), and May 2006 (1,111).  On a month-to-month basis, sales of condominium also rose in May, climbing 30 percent from an upwardly revised 807 units sold in April. 

Demand for condos remains strong, especially among suburban empty-nesters looking to purchase in Boston, as well as with investors, and renters looking to become first-time homeowners, but a shortage of condominiums for sale has resulted in fewer opportunities to buy and put upward pressure on prices which is holding back even healthier activity.

To access monthly data by community, check out our Local Market Update reports, and our Monthly Market Indicator Reports for comprehensive regional housing market data for the GBAR/GBREB jurisdiction.